When a Company Decides to Expand into New Industries, It

question 41

Multiple Choice

When a company decides to expand into new industries, it must:

• A)develop "multibusiness model" that justifies its entry into different businesses.
• B)halt marketing activities in the current industry to avoid being associated with one specific industry.
• C)select a new CEO and reappoint the board of directors.
• D)create one common business model for all the industries rather than each business unit.
• E)avoid talking about ways of increasing profitability in the business model.

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Definitions:

Coffee Shops

Retail establishments that primarily sell coffee, along with other beverages and light snacks, often serving as social hubs in communities.

Normal Good

A type of good for which demand increases when consumer income increases, and decreases when consumer income decreases, assuming all other factors remain constant.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Quantity

The amount or number of a material or immaterial good considered as a unit or in total.